At the end of August, it was announced that certain individuals were finally being brought to justice in an astonishing scheme to deceive banks and credit card companies into processing more than $150 million in credit and debit card payments. This was done on behalf of merchants in both prohibited and high-risk businesses like online gambling, debt collection and prescription drugs. Payday lending and debt reduction were also among the merchants involved.
This is all according to an indictment unsealed in Boston. As of the latest report, three of the four individuals have been charged and arrested. The fourth has not yet been arrested and is a fugitive on separate federal charges. It appears everything went wrong for these individuals when they directed some of their calls and emails into Massachusetts.
According to a press release, these individuals are charged with “conspiring to deceive banks into allegedly processing more than $150 million in credit and debit card payments on behalf of merchants involved in prohibited and high-risk businesses, including online gaming, debt collection, debt relief, online pharmaceuticals and payday lending, among others.”
Two of the individuals – Ahmad “Andy” Khawaja and Thomas Wells – were charged with wire fraud consipracy. The other two individuals – Mohammad (Moe) Diab and Amy Ringler Rountree – have been charged with wire and bank fraud conspiracy. Thus far, Khawaja remains a fugitive.
How did they do it? According to reports, Khawaja was the owner and CEO of Allied Wallet, a payment processing company headquartered in Los Angeles. The other individuals involved worked in leadership positions at the company. Allegedly, they aimed to defraud multiple financial institutions by providing payment processing services to clients operating prohibited or high-risk businesses.
This was allegedly accomplished by creating shell companies and designing fake websites. It ultimately allowed the four to allegedly obtain over $150 million in payment card processing.
The danger in this case? Unfortunately, it puts high-risk merchants in a bad light There are actually many legitimate business owners that find themselves in this category. Startups even find themselves in this spot because they lack adequate financials and business history. Financial institutions and credit card processors are unwilling to work with the high chargeback and fraud rates some industries face.
Thankfully, there are many industry-leading high-risk providers that specialize in working with these companies. They provide customized products and services that help these business owners succeed.
If your business is looking for secure payment processing that provides your customers with a variety of payment options, consider browsing the many reviews Best Payment Providers has to offer. Discover the provider that meets your needs and gives your customers the best experience.
Author Bio: Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of merchant accounts. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice-cream on his backyard porch, as should all right-thinking people.